, Port Arthur, Texas

Local News

March 21, 2013

PA Housing Authority penalized by HUD, $6M in funds questioned

PORT ARTHUR — The Housing and Urban Development Department penalized the Port Arthur Housing Authority in February, responding to a July federal audit that questioned the authority’s spending of nearly $6 million in federal funds.

The letter from the HUD Houston Field Office, dated Feb. 28, demanded that the housing authority repay approximately $1.5 million non-federal dollars and funnel those funds into PAHA’s federal programs, such as its Housing Choice Voucher program.

The News obtained the letter through a Texas Public Information Act request.

The letter — signed by Director of Public Housing Daniel Rodriguez Jr. — states that the PAHA had not provided sufficient documentation to support its reasoning behind spending the $6 million the HUD Office of Inspector General had called into question.

In response to the “insufficient” documentation provided, the PAHA must allocate the $1.5 million of money it has earned through its own developments into federal public housing programs, the letter states. The housing authority had 10 days to comply with the letter.

And Seledonio “Cele” Quesada, executive director of the PAHA, said his staff had fully complied with Rodriguez’s letter.

“As a result of this process, we have become a much stronger housing authority,” Quesada said.

This was the first time the PAHA had heard from HUD since it responded in September to the July audit.

The housing authority shifted funds it has earned through redevelopments of public housing units into its public housing programs, Quesada said. The PAHA earned profits from the redevelopment of the Valley View Estates and Bellbrook Estates by combining public and private housing.

Now the PAHA can move forward with its redevelopment plans for the Carver Terrace Apartments, Quesada said. But the relocation and demolition application for Carver Terrace has not been approved by HUD yet.

The HUD Office of Inspector General released an audit report of the PAHA June 1 that outlined the various ways the housing authority inappropriately handled its funds. The audit, conducted by the Regional Inspector General for Audit in Fort Worth, found that the PAHA questionably spent nearly $6 million from Jan. 1, 2009, through Dec. 31, 2010, and failed to comply with federal standards of how funds should be spent.

This was a follow-up audit to one done as part of a review of funding from the American Recovery and Reinvestment Act of 2009. The first audit recommended that the government rescind the $725,546 the housing authority received through the Recovery Act. HUD recovered $657,906 of those funds.


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